​Moving on, Pg6

Key Highlights:

• December 2025 retail inflation reached 1.33%, a three-month high but also the third-lowest since the current CPI series began.
• April-December 2025 inflation averaged 1.7%, significantly lower than the 4.9% in the same period of 2024.
• RBI's December survey indicated households perceived current inflation at 6.6%, expecting it to rise to 7.6% in three months and 8% in a year.
• New CPI series with base year 2024, incorporating the Household Consumption Expenditure Survey 2023-24, will be released on February 12.

Detailed Insights:

• Discrepancy exists between official inflation data and the inflation experienced by people, as reflected in slower private consumption growth.
• Outdated CPI with 2012 base year fails to capture current consumption patterns influenced by central and state subsidies.
• National inflation figures aggregate price changes across diverse regions, inevitably losing nuances in the process.
• Updated CPI series is expected to provide a more accurate representation of current inflation trends and aid better policy decisions.

Key Concepts Involved:

• Retail Inflation: The change in the price of a basket of goods and services that households typically purchase.
• Base Year: The reference year used to compare price changes in subsequent periods in an index.
• Weightage: The importance assigned to different items in an index based on their share in overall consumption.